Homebuyers and builders caught in perfect construction storm

New home buyers are facing delays and price increases as builders cope with mounting materials and labour shortages in the midst of a housing and infrastructure boom.

They are being warned to expect budget blowouts and extended completion dates while builders see their profit margins wiped out by rising costs.

Industry sources say it is a perfect storm whipped up by the impacts of the pandemic on global supply chains and the white-hot demand for housing driven by record low-interest rates.

On the ground, it means a scramble for materials as builders try to secure supplies, with reports of orders being gazumped by those willing to pay more.

Some builders are revising or even rescinding contracts to stay ahead of the wave of price increases and there are fears that some might not survive.

One of Queensland’s largest residential builders, Privium Group, faces a $28 million collapse amid warnings of a profitless boom.

Master Builders ACT CEO Michael Hopkins said the construction industry was facing a serious issue with a combination of soaring prices, delivery delays and labour shortages.

Mr Hopkins said members had reported dramatic price increases from suppliers this year, which in some cases have been more than 30 per cent.

“Initially, we heard about shortages of timber, then shortages and price increases for steel,” he said.

“But we’re now hearing that most building products are experiencing price increases and shortages including glass, windows, insulation, as well as timber and steel.”

Homebuyers and builders caught in perfect construction storm | Riotact (the-riotact.com)

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